Honda cites growing electric car demand for Hitachi venture

By Ma Jie and Yuki Hagiwara, Bloomberg News

February 7, 2017

Photo: Kazuhiro Nogi /AFP /Getty Images

Honda CEO Takahiro Hachigo (right) answers questions as Hitachi Automotive CEO Hideaki Seki listens during their joint news conference Tuesday in Tokyo. Japanese automaker Honda announced a joint venture with Hitachi Automotive to collaborate in the field of electric and hybrid vehicles.

Honda CEO Takahiro Hachigo (right) answers questions as Hitachi...

Honda Motor Co. plans to set up a joint venture with Hitachi Automotive Systems to develop, produce and sell motors for electric vehicles, citing the expected increase in demand for electric autos with tougher environmental standards.

Express Newsletters

Get the latest news, sports and food features sent directly to your inbox.

The joint venture has plans to manufacture in Japan, U.S. and China, and will consider using Hitachi’s existing plants in those countries, Hitachi Automotive CEO Hideaki Seki said at a Tuesday briefing in Tokyo. The new company will also sell to automakers other than Honda if there’s demand, he said.

Carmakers are forging partnerships amid pressure from regulators and rising costs for developing cleaner vehicles and self-driving cars. Toyota Motor Corp. and Suzuki Motor Corp. on Monday signed an agreement to undertake a “concrete examination” of a business partnership. Honda last month said it will jointly manufacture fuel-cell systems with General Motors Co.

Establishing a joint venture with Hitachi can save costs as motor production requires huge capital investment, Honda CEO Takahiro Hachigo said at the briefing. It will also combine the advantages of both companies to advance the competitiveness of the motors from the joint venture, he said.

Tokyo-based Hitachi Automotive, established in 2009, is a subsidiary of the conglomerate Hitachi Ltd. The company first started selling motors for electric vehicles in 1999 and supplies them to Nissan Motor Co., Toyota and General Motors.

The motors from the Honda-Hitachi venture will be used for hybrids, plug-in hybrids and electric vehicles, Hachigo said. Even with the new company, Honda will continue to make its own motors and keep production lines in Japan, he said.

The deal, signed last week, is part of a big push by Honda into electric cars. The joint venture, which has yet to be named, will be 51 percent owned by Hitachi and will have manufacturing and sales operations in the U.S. and China, the companies said. The joint venture, capitalized at $45 million, will be based in Hitachinaka city, north of Tokyo.